Condo Class Action Launched

By Martin van den HemelBlack Press, Tri City News
Dec 09 2005

A newly-elected Surrey councillor and her husband are the representative plaintiffs in a class action lawsuit filed Tuesday against the Canada Mortgage and Housing Corporation on behalf of all B.C. leaky condo owners.

Linda Hepner, who was sworn in Monday as a member of Surrey city council and until last week was the city's manager of economic development, and her husband, Alan McMillan, an Emily Carr Institute student registrar, bought their White Rock condo on Thrift Avenue when it was brand new in 1996. But it wasn't long after that the couple was saddled with a $60,000 repair bill because of water leaks that led to rotting walls.

"It meant my husband is still working," Hepner said, noting that her 60-year-old husband could have taken early retirement but needed to stay at work to pay for the repairs.

"Unless you're independently wealthy, that kind of a hit is significant in anybody's life."
As the representative plaintiffs, the couple's story is typical of the many condominium owners who, since the early 1990s, purchased a home that eventually required extensive repairs due to moisture damage and mould.

In Hepner's case, although there were only eight units in the self-managed three-storey wood-frame building, it was not easy to build consensus on what course of action to take to repair their building after leaks began to appear.

After an engineering firm was brought in to inspect their building, the repair estimate exceeded $500,000, a figure that left Hepner "choked," though "no more or less so than I'm sure hundreds and hundreds of others were."

Hepner and her neighbours have never seen a penny of compensation from the developer and builder of the complex.

The ordeal of fixing their building was so exhausting, Hepner explained, that seeking legal remedies simply wasn't an option they actively pursued before this week.
After Hepner read about Vancouver law firm Singleton Urquhart's plans to pursue a class action lawsuit, the couple made the decision to step forward.

The lawsuit seeks compensation from the federal government - specifically the CMHC - for the "thousands of homeowners in British Columbia who have been plagued by the punitive cost of repairing structural damage to their homes caused by water ingress and subsequent rotting of the home's structure."

Asked what she would like to see done for leaky condo owners, Hepner said: "I think that we know what caused the problem. I think that if there are individuals... within the government that knew this was going to be an issue and did nothing to either... advise the public generally as they should have... or deliberately withheld it, then they need to be held accountable."

Earlier this year, Black Press newspapers revealed the results of a freedom-of-information request to the CMHC. Hundreds of pages of documents marked restricted and confidential showed that senior bureaucrats and top federal politicians were aware of serious problems relating to energy conservation measures in house construction techniques as far back as 1981.

Those documents are being used by the law firm in proving its claim that "CMHC took no, or no adequate steps, to ensure this defect did not propagate on the west coast or to warn the housing industry or prospective condo purchasers of the problem," according to lawyer John Singleton.

While the CMHC did conduct extensive investigation, it then "for some inexplicable reason, failed to take the appropriate action to see that the course was corrected," he said. "Had they done so, the statement of claim infers the leaky condo problem would not have happened."

If the lawsuit is certified by the court, following a hearing that could begin in late spring or early fall of 2006, other leaky condo owners will be invited to join the lawsuit.
A previous attempt to obtain certification of a leaky condo class action lawsuit failed.